Today, financial services has the highest concentration of Frontier Firms—organizations that embed AI agents across every workflow to drive speed, agility, and scalable innovation. These are companies that have demonstrated greater business impact from AI by blending human judgement with AI agents. A November 2025 IDC study commissioned by Microsoft shows that Frontier Firms report returns on their AI investments roughly three times higher than slow adopters.¹

In my previous blog, I detailed a three-phase roadmap for banks to become Frontier Firms. Now, I’d like to share essential practices in AI adoption that we believe are predictors for financial services success in 2026. These are based on hundreds of conversations I’ve had with customers, industry leaders, and technologists worldwide over the past three months. Organizations aiming to maximize AI’s potential in 2026 and beyond should consider these practices as part of their approach to AI transformation.

The new essentials for AI success in financial services

In 2026, success won’t come from experimenting with AI, it will come from re-architecting core business processes to be human-led and AI-operated. Frontier Firms are already heavily invested, with 70% of organizations across industries saying that in the next 24 months, they plan to increase their budgets for generative AI and agentic AI.¹

In financial services, there is pressure from senior executives and boards to move at greater pace and scale—to differentiate their firms by infusing AI into the fabric of their business.

In response, our customers are eager to learn how Frontier Firms do it. What are they doing to drive real impact faster than others? How do they make the right investments? What can they not afford to miss?

Regardless of when and how a firm acts, we see five essential keys to success, not all of them purely technical.

1. Value creation will drive innovation in agentic AI

As the adoption of AI evolves, Frontier Firms are re-thinking how they measure value creation. The traditional approach to crafting business cases is giving way to a new, more dynamic model as Frontier Firms are now measuring the impact of AI as use cases are deployed. A/B testing (comparing two versions of a use case to understand which delivers greater impact) has helped organizations like Investec quantify meaningful benefits, including saving bankers up to 200 hours a year with Microsoft Copilot for Sales. Focusing AI enablement on customer-facing teams is a practical way to move beyond internal productivity gains and begin influencing top-line growth. 

Frontier Firms in financial services are now focusing on the measurable impact of AI—revenue growth, increased margins, and market share gain from new products, differentiated customer experiences, and empowered employee workflows. This goes well beyond use cases focused on efficiency. According to IDC, 36% of financial services firms are planning AI use cases in the next two years to boost revenue with new business models, products, or services.¹

To scale AI to more powerful, multifunction workflows, Frontier Firms are creating agentic operating models that embed AI more deeply across the business and the workforce. Working under the direction and oversight of humans, these new AI agents can reason, plan, and act across critical workflows.

Embedding agents correlates with value creation by aligning AI with core processes and key metrics. A good example is Generali France, a key player in the insurance sector in France. The organization is powering strategic use cases in customer relations and core business expertise with AI agents. In their helpdesk operations, they’ve developed a 24/7 voice assistant that’s capable of reassuring claimants before a human steps in. Nearly 1.3 million calls—representing 30% of requests—are resolved directly by clients, with no human intervention needed.

IDC predicts such adoption of agentic AI will triple in the next two years.¹ Winning firms will anchor their innovation to business outcomes that matter in financial services (such as safer payments, faster credit decisions, and decreased fraud, to name a few), and report outcomes in quarterly scorecards so teams see purpose, not just tools.

2. Skilling and AI fluency will maximize workforce value

Even the best technology will fall short if workers aren’t trained and supported to embrace it.

Successful transformation addresses the human aspect—ensuring everyone understands the benefits and feels part of the journey. Change management is both a top-down and bottom-up process. Leadership must set the vision while making sure that employees at every level are empowered to contribute.

Organizations should start with skilling, with a focus on “learning in the flow of work.” Leaders can foster learning by embedding it into daily tasks so that skills stick and compound over time. They should consider building learning pathways focused on AI fluency for all employees, plus specialized tracks for specific roles, then reinforce adoption with incentives that reward employees for integrating AI into everyday workflows.

Lloyds Banking Group offers a powerful example. Departments competed for a limited number of Microsoft 365 Copilot licenses with bids based on business cases. The firm built a network of 1,000 volunteer “flight instructors” and hosted weekly “promptathons” to share best practices. The impact: over 10,000 employees trained, with 93% daily usage among 30,000 licensed users.

3. Innovation will expand across business processes

Frontier Firms are quickly moving beyond single function use cases and innovating across seven business functions on average. Focused on expanding impact across the business, AI innovation in financial service will map to key functions such as research automation in capital markets, claims in insurance, and anti-money laundering or fraud in banking. Plus, more than 70% of firms are using AI in customer service, marketing, IT, cybersecurity, and product development.¹

This broad approach is delivering better outcomes for Frontier Firms on many critical fronts: top-line growth (88%), brand differentiation (87%), cost efficiency (86%), and customer experience (85%).¹ Interestingly, it also opens innovation to drive new opportunities, such as transforming support functions into revenue generators through new customer experiences.

The impact of advanced AI spans the financial services industry. In capital markets, it improves market research and analytics, personalizes the client experience across digital channels, and helps tailor services to individual needs. BlackRock, for instance, is transforming its investment lifecycle by embedding AI into its Aladdin platform, used by tens of thousands of users. Likewise, LSEG and Microsoft have built tools that let financial professionals quickly build custom agents leveraging 33-plus petabytes of trusted market data.

In banking, AI is equipping financial institutions with new tools for personalized service and stronger client relationships. AI will help to improve the effectiveness of targeted marketing campaigns, streamline lending and mortgage processes, and safeguard assets with advanced fraud analysis. AI agents will continue to proliferate, thanks to efforts such as Argentina’s Banco Ciudad, which launched a new AI Center of Excellence that delivered 10 agents in six months to improve customer service, workflow automation, and cross-team integration.

In insurance, AI will accelerate value by automating complex, high-value processes such as underwriting, claims management, and policy administration while improving risk modeling and compliance. It will become more effective in helping insurance agents better serve clients, and in helping customers make the best policy choices. Fraud detection and decision making will advance, thanks to innovations such as a new service from Shift Technology designed to help insurance companies by automating classification and extraction of unstructured data.

4. Responsible AI and regulatory readiness will be competitive advantages

The firms that lead in AI will also lead in governance. IDC predicts 1.3 billion AI agents will be in business workflows by 2028.² As they become part of the organization, business leaders need to think of them as employees in many ways. They will require identities, permissions, and oversight. They’ll need to be trained, monitored, and auditable.

Proactive compliance is now an imperative, if not a competitive advantage. In 2026, regulatory complexity will only intensify, meaning that trust must be the foundation for scale and innovation. Frontier Firms embed responsible AI frameworks into every stage of the lifecycle, from design to deployment and monitoring. Leaders will integrate data privacy, encryption, and access controls across AI innovation from day one.  

Bradesco’s Bridge is an example of how a bank can responsibly operationalize agentic workflows. Bridge uses Microsoft Azure AI to provide a governed API layer to enforce consistent policies and secure data access. The result is 83% resolution rates for digital service and a 30% reduction in tech costs.

Complementing this, Microsoft’s new Agent 365, announced at Microsoft Ignite 2025, addresses the critical need for control at scale. Agent 365 is a unified control plane that extends enterprise management and security to partner-developed agents and even those running outside the Microsoft Cloud. Integrated with Microsoft Entra, Microsoft Purview, and Microsoft Defender, it enforces identity, permissions, and data protection while surfacing telemetry for ROI and compliance. All agent activities are logged into Microsoft Sentinel and Purview audit logs, giving security operations teams a full audit trail to investigate incidents. It also minimizes the risk of “shadow AI” and helps ensure that agent deployment is compliant. 

5. Data strategy will unlock AI at scale

Perhaps the single most important requirement for success with agentic AI is data readiness. Without the right strategy to ensure data interoperability and real-time intelligence, an organization’s most important initiatives are destined to fall short. 

To derive the most value from AI, the first step is to unify all of the organization’s data. Fragmented systems—core banking, risk models, compliance archives, customer relationship management—create blind spots. The traditional approach to doing this—moving all of an organization’s data to a single location—has often proven costly and resource intensive. The new approach is to use a unified data platform, such as Microsoft Fabric, which connects data wherever it sits, giving organizations a single source of truth, even when the data resides on other platforms or systems. This approach empowers organizations to deliver faster insights, lower costs, and unify governance, accelerating their AI deployment.  

LSEG leveraged Microsoft Fabric to modernize their data infrastructure and accelerate time to market. LSEG uses Apache Spark on Fabric to process around 80,000 files daily, consuming approximately 280,000 capacity units per day. Usage is growing rapidly, with month-on-month consumption increasing by more than 50%, signaling the start of a transformative journey.  

Finally, organizations must embed governance and security. Identity-based access, audit trails, and adaptive risk controls are non-negotiable.

AI at scale is not just about models—it’s about the foundation: data, cloud, and governance. Microsoft delivers on all these imperatives: Microsoft Fabric IQ for unified semantics, Foundry IQ for contextual knowledge, Azure for scalable performance, and Microsoft Agent 365 for governance. The mandate is clear—modernize your data foundation today to avoid challenging consequences later.

Now is the time for agentic AI in financial services

Financial institutions have long pursued productivity gains to reinvest in growth, and that imperative remains. But AI is no longer just about cost savings—it’s about reinventing how organizations engage customers, redefine services, bend the innovation curve, and create competitive differentiation.

To empower our customers to accelerate to scale, Microsoft has built a full stack enterprise AI platform that is fully integrated. Our approach is architected around 3 objectives: 

• AI in the flow of human ambition
  Copilot can be used by end users to develop personal agents to execute tasks on their behalf. For low-code development, customers can use Microsoft Copilot Studio to build agents and assistants that can answer questions and execute workflows that integrate with their data and line of business systems. Both are powered by Work IQ—an intelligence layer that customers can use to give real-time insights into how teams are working across applications and processes and improve operational performance. 
• Ubiquitous innovation
  To enable ubiquitous innovation, Fabric is an AI-powered, end-to-end data and analytics platform that breaks down the data siloes and unifies data that resides in different places. It is powered by Fabric IQ, a semantic intelligence layer that enables customers to organize data around the language and meaning of their business (such as relationships, entities, and logic) so teams can build agents that are grounded in the same semantic understanding of the business.
  
  Ubiquitous innovation is also enabled by Microsoft Foundry, Microsoft’s unified Azure platform for building, deploying, and optimizing pro-code AI apps and agents—bringing models and tools together. Foundry IQ makes it easier for teams to build reliable agents and apps that use trusted governed knowledge. Foundry IQ is a knowledge grounding layer for agents: it connects AI apps and agents to content across many sources (like documents, policies, Microsoft SharePoint, OneLake, and external stores) using an Azure AI Search–powered knowledge base and a single grounding API, with permission-aware access. 
• Observability at every layer
  As organizations navigate the agentic era in financial services, the question isn’t just how to deploy AI agents—it’s how to do it securely, at scale, and in a way that positions the organization as a leader. This requires a connected, trusted, and scalable platform to orchestrate AI across the business, which Microsoft offers. With Agent 365 as a unified control plane, organizations gain a single governance layer that extends enterprise-grade identity, security, and compliance to every agent—whether it’s built in-house or running on external clouds. This means organizations can confidently embrace AI innovation without sacrificing oversight or regulatory alignment. Microsoft’s approach means organizations aren’t just adopting tools; they’re anchoring their business to the platform for the open agentic web—a trusted, interoperable ecosystem where agents and humans collaborate seamlessly.  

The firms that embrace this shift—modernizing data, embedding governance, and preparing their workforce—won’t just adapt; they’ll lead the next era of financial innovation.

Learn more

• Read the Becoming a Frontier Firm: AI in Financial Services e-book—your blueprint for scaling with AI, featuring case studies from banking, capital markets, and insurance.
• Watch Leading at the Frontier: AI Innovation in Financial Services to see real-world AI strategies from industry innovators and experts.
• Visit Microsoft for Financial Services to learn more about how Microsoft empowers financial services organizations to achieve more.

¹ IDC, What every company can learn from Frontier firms leading the AI revolution, sponsored by Microsoft, November 2025.

² IDC Info Snapshot, sponsored by Microsoft, 1.3 Billion AI Agents by 2028, May 2025 #US53361825.

The post AI transformation in financial services: 5 predictors for success in 2026 appeared first on The Microsoft Cloud Blog.

As banks compete aggressively with AI, many are gravitating toward the concept of the Frontier Firm—a new kind of enterprise that doesn’t just use AI, but rearchitects itself around it. Frontier Firms view AI agents as digital colleagues, empower employees to act as agent bosses, and operate with intelligence on tap to work smarter, scale faster, and create new value.

Characteristics of the Frontier Firm in banking

The speed of transformation sparked by generative AI is unprecedented, leaving banks precious little time to make critical decisions. Across industries, 82% of leaders say 2025 is a pivotal year to rethink their organizational strategy, and 81% expect AI agents to be deeply integrated into their workforces within the next 12 to 18 months. In banking, 70% of companies that have adopted AI are realizing cost savings.² The challenge is to forge a strategy that delivers immediate ROI while also fostering long-term transformation.

The Frontier Firm concept brings clarity and a workable blueprint to this high-stakes challenge. It blends machine intelligence with human judgment, resulting in systems that are AI-operated but human-led. The Frontier Firm features the following characteristics:

• Intelligence on tap: AI capabilities are embedded across workflows and decision-making.
• Work chart versus org chart: Teams form around outcomes, not departments.
• Agent–boss mindset: Every employee manages and collaborates with AI agents.

With these principles in mind, banks can advance their innovation efforts without waiting for perfect conditions. Most banks are already well positioned to make quick strides.

The Frontier Firm in banking: Three-phase AI transformation journey

The journey to becoming a Frontier Firm plays out in three phases, each phase representing a deeper integration of AI into business operations. Organizations may operate in multiple phases at the same time, depending on function and maturity.

Phase 1: Human with assistant

In this phase, the goal is to empower employees with AI agents such as copilots and digital assistants that help improve productivity, generate efficiencies, and reduce drudgery.

Early innovation with generative AI in banking was limited, focused primarily on internal needs and designed to evaluate the technology and its impacts. These initial use cases quickly demonstrated both the immediate value and long-term potential of AI.

For many banks, an especially powerful productivity driver has been the adoption of Microsoft 365 Copilot, which embeds generative AI into everyday apps like Word, Excel, PowerPoint, Outlook, and Teams. In the UK, for example, with Copilot, Hargreaves Lansdown reduced the time required to record customer meeting notes from an average of four hours to just one. In Australia, Copilot helped Bank of Queensland cut the time required to produce drafts of internal manuals by 99%, marketing content by 88%, and human resource documents by 75%.

Complementing Microsoft 365 Copilot are a set of role-based agents that support specific job functions, one of which is Microsoft Copilot for Finance. Designed to help streamline operations and make faster decisions, Copilot for Finance connects with financial systems such as Dynamics 365 Finance ERP and even third-party platforms. At Microsoft, it delivered 22% in cost savings on reconciliation tasks for our corporate Treasury organization, doing in 10 minutes what previously took more than an hour. 

A key lesson here is that integrating AI into familiar productivity tools and daily workflows promotes quick adoption, as opposed to introducing new applications or interfaces. To amplify the impact, Copilot solutions can be enhanced to seamlessly work with a bank’s internal data and key partner connectors. For example, Wells Fargo built an agent for 35,000 bankers across 4,000 branches to help its employees find information to better assist customers. As a result, 75% of searches now happen through the agent, and query response times have gone from 10 minutes to just 30 seconds.³

Elsewhere, Barclays deployed Copilot to 15,000 users, and the results soon led to an expansion to 100,000 employees worldwide, incorporating the bank’s broad ecosystem of collaboration tools, portals and online resources. Likewise, using Azure OpenAI Service and Azure AI Search, Swiss bank UBS developed a set of “Smart Assistants” to help client advisors deliver more personalized insights by synthesizing 60,000 documents, plus a Legal AI Assistant (LAIA) that transforms how teams search a repository of 26 million multilingual legal documents.

An important counterpart to embedded copilots is an emerging class of personal agents within the Microsoft 365 Copilot suite, which can tackle deeper, domain-specific tasks. The Researcher Agent delivers in-depth insights by synthesizing internal and market data to support functions like strategic planning, compliance, and competitive analysis. The Analyst Agent works like a virtual data scientist, transforming raw data into forecasts, customer behavior visualizations, and automated reports.

Becoming a Frontier Firm: AI in financial services

See real-world examples of how Frontier Firms are leading with AI.

Read the e-book

Phase 2: Human–agent teams

In the second phase, AI agents take on specific tasks under human direction. Employees delegate tasks to them, review outputs, and intervene only for exceptions.

Some banks are now developing powerful agents to assist employees across a broad range of key tasks such as reconciling transactions, performing KYC checks, or conducting background verifications. Agents can also, help manage onboarding journeys, verify documents, and deliver training. The net effect is to free employees to focus on higher-value work at a greater scale.

For example, Dutch ABN AMRO Bank replaced its legacy chatbots with two new AI-powered assistants, Anna and Abby, that autonomously manage employee and customer conversations using Azure AI Language for intent recognition. Employees delegate routine tasks to the agents, which escalate to humans only for exceptions. This reduced drop-off rates, improved Dutch language accuracy by 7%, and now supports more than 3.5 million conversations annually.

Beyond customer service, banks are deploying agents to streamline complex, high-volume processes. In mortgage lending, agents can automate document verification, income validation, and regulatory checks—reducing cycle times and improving transparency. This helps lessen or eliminate bottlenecks caused by manual dependencies, accelerating approvals and improving customer satisfaction.

AI innovation in financial services is moving to a more powerful agent-based model in which AI serves as a collaborative tool. Financial services provider Virgin Money built a new contact center agent called Redi that triages customer inquiries, executes predefined journeys, and seamlessly escalates sensitive exceptions, such as bereavements, to human agents. Designed with input from customer center staff to emulate live interactions, Redi embodies the idea of “human-in-the-loop” governance, where AI handles the bulk of execution, but employees retain control over edge cases. Staff now view Redi as “another colleague” that supports them by triaging tasks and enabling them to focus on empathy and relationship-building.

Phase 3: Human-led, agent-operated

In this advanced phase, AI agents do more than assist or collaborate, they own and execute complete business processes. Humans provide direction, oversight, and exception handling, but day-to-day operations are managed by agents.

Agentic systems can reason, plan, and act independently to achieve goals. For example, an agent that can shop for clothing, plan a vacation, or buy groceries based on a consumer’s preferences and limits. This is the vision behind a new AI-powered platform that enables agents to “find and buy” on behalf of users.⁴ Features such as tokenized digital credentials, which confirm that an agent is authorized to act on a consumer’s behalf, foreshadow new ways agentic AI can deliver seamless, secure, and personalized experiences, and create new value.

Agentic AI-powered commerce and payments are driving a new suite of tools being developed by PayPal, designed to help developers build AI agents that can transact, manage invoices, and track shipments using PayPal’s APIs.⁵ As part of a unified platform for commerce, these tools let agents autonomously execute end-to-end commerce workflows using natural language.

Many banks are exploring innovation in agentic AI with scenarios spanning a broad range of business services, including advisory and customer service support; channels, like kiosks, online, social, and contact center; and operations, such as trading, payments, treasury, and more.

A key enabler of the Microsoft vision is the unique role of Microsoft’s global partner ecosystem, which encompasses an unparalleled range of independent software vendors (ISVs), global systems integrators (GSIs), and advisory firms. Our partners are building domain-specific Copilots, workflow agents, and Environmental, Social, and Governance (ESG) dashboards and regulatory compliance tools embedded within Microsoft AI, Microsoft 365, and Microsoft Azure. By incorporating agents into everyday tools and workflows, they are enabling the advanced real-time decision making, personalized customer engagement, and intelligent operations that make human-led, agent-operated AI a reality for banks.

The key role of governance in advanced AI

The promise of the Frontier Firm is to reimagine banking in ways that advance competitiveness and customer value. This can only happen with effective governance frameworks, which help ensure that all AI is developed and deployed safely and responsibly.

AI must be trustworthy, auditable, and aligned with corporate governance frameworks, so businesses can utilize its power without losing control. While many providers focus narrowly on compliance, Microsoft embeds governance into every layer of our AI stack, grounded in Responsible AI principles—fairness, reliability, privacy, inclusiveness, transparency, and accountability—and operationalized through centralized councils, cross-functional oversight, and tooling like Microsoft Purview.

For banks, this means AI systems that are not only compliant but also auditable, explainable, and aligned with regulatory expectations. We deliver governance at scale with a blueprint for responsible transformation and safeguards that protect customers, reputations, and regulatory standing.

Concurrently, a secure foundation is also critical. As your employees and customers interact with AI services, it is emerging as a new attack surface that requires world-class protection. Microsoft provides a comprehensive security platform, Microsoft Security Copilot with Microsoft Sentinel, which is fully integrated into our AI platform.

Learn more and explore Agentic AI

Helping banks chart their unique, comprehensive journey to becoming a Frontier Firm is central to our work at Microsoft. We build long-term relationships with customers, technology partners, data providers, and industry stakeholders to help banks create new value and customer relationships.

We have developed a five-step maturity journey and a set of foundational elements for any bank to become a Frontier Firm. To explore how your organization can move forward, start by engaging with your Microsoft representative or service provider.

• Visit Microsoft for financial services to learn more about how Microsoft empowers financial services organizations to achieve more. 
• To see how leaders in financial services are successfully using AI to transform complexity into opportunity, watch Leading at the Frontier: AI in Financial Services. 
• Get a practical transformation framework and see how Frontier Firms lead with agentic AI in our Becoming a Frontier Firm: AI in Financial Services e-book.
• Learn more about using Copilot in Financial Services and download the Financial Services scenarios kit.

¹ Forbes, The Future of AI in Financial Services, October 3, 2024

² KPMG, Intelligent banking report, February 2025

³Microsoft Work Trend Index Annual Report – 2025: The year the Frontier Firm is born, April 23, 2025

 ⁴ Visa, Find and Buy with AI, Visa unveils new era of commerce, April 30, 2025

⁵ PayPal Newsroom, PayPal brings together developers, AI leaders to power agentic commerce, April 29, 2025

The post The Frontier Firm in banking: A blueprint for advanced AI innovation appeared first on The Microsoft Cloud Blog.

This powerful advantage is now available with Meeting Prep for Financial Services (preview), the newest addition to Microsoft Cloud for Financial Services and an innovation from Microsoft’s long-term strategic partnership with LSEG (London Stock Exchange Group). The new app, built and optimized for Microsoft Teams and Microsoft 365 Copilot, offers deep links and interoperability with LSEG’s next-generation data and analytics workflow solution, LSEG Workspace, to augment the workflow experience. 

Meeting Prep for Financial Services empowers investment bankers and other professionals in client-facing roles by helping to save time preparing for client meetings, improve client engagement and decision-making, and streamline client communications. For professionals in firms with a Microsoft Teams license and LSEG Workspace license, the app fosters collaborative workflows and boosts productivity. Generally available in December 2024 and now in public preview, Meeting Prep for Financial Services is an important milestone in the LSEG and Microsoft partnership launched in 2022 to jointly develop new products and services for data and analytics.  

“We are thrilled with the positive reaction from our customers, who have highlighted the significant time savings and efficiency benefits they are experiencing with Meeting Prep for Financial Services. By integrating market-leading data and analytics from LSEG Workspace with Microsoft’s generative AI capabilities, we are empowering financial professionals to prepare for client meetings more effectively and make more informed decisions.”

Nej D’Jelal, Group Head, LSEG Workspace Platform 

How our financial services customers and partners are advancing with AI 

Innovation is happening in every corner of financial services as organizations engage with Microsoft and our global partners. According to the Gartner 2025 CIO Agenda: Top Priorities and Technology Plans for Banking, “the biggest expected changes in technology investments are generative AI (39%), cyber security/information security (34%), and AI (33%).”¹ Such innovation requires a strong foundation of security, privacy, and trust, which is why we place special emphasis on safeguarding data, taking robust privacy measures, and committing to responsible AI principles. Security is a top company-wide priority for Microsoft, and our Secure Future Initiative reflects our commitment to continually advancing the built-in security of our products and services. 

Microsoft Cloud for Financial Services offers this foundation with services and solutions tailored to the industry, empowering firms to achieve impactful business outcomes quickly—whether transforming the customer experience, empowering employees, managing risk and compliance, or modernizing core systems. Organizations can drive innovation and improve resilience by taking advantage of fit-for-purpose platform services. And with Microsoft Fabric, an AI-powered analytics platform, firms can unite their data, improve collaboration, and reduce the cost and effort of AI development, while simplifying governance and enhancing security. 

Transforming the customer experience 

The importance of data in customer experiences is magnified when viewed through the lens of the customer journey—in every place, time, and channel that a customer interacts with their financial institution. To deliver better service and more meaningful interactions, firms need to create seamless, consistent experiences and provide a complete view of the relationship.  

A great example is how Microsoft and BlackRock are partnering to build next-generation solutions for the company’s Aladdin investment management platform, which runs entirely on Microsoft Azure. BlackRock last year launched a new generative AI tool for its private markets platform, and is now launching the new Aladdin Copilot, which surfaces answers instantly to support key business decisions and enable better decision-making.  

Many other firms are reshaping how they deliver experiences, products, and services through generative AI. ERGO Insurance has revolutionized its customer service in just four months using an AI Virtual Agent powered by Azure, developed by EBO. Virgin Money has developed an award-winning virtual assistant using Microsoft Copilot Studio, integrated with Microsoft Dynamics 365 Customer Service to enhance the omnichannel customer experience. First National Bank has improved customer communications with Microsoft Copilot for Sales, ensuring client responses reflect understanding of their requests. And CommBank is using generative AI to deliver personalized customer experiences and help protect against fraud, scams, and financial abuse.

Empowering employees

With the right communications and collaboration tools, employees can be dramatically more effective in addressing business needs and servicing customers. The first and often most powerful way to benefit from generative AI is to use Microsoft 365 Copilot, which recently launched a new wave of features as well as enhancements to Copilot in Microsoft 365 apps. A recent Total Economic Impact (TEI) study by Forrester, commissioned by Microsoft, projects 112 to 457% projected ROI using Copilot for three years, and 30% reduction in new-hire onboarding time.²  

Beyond Copilot, customers are using Azure OpenAI Service to build custom agents and generative AI applications. These also offer significant ROI. Another recent Forrester TEI study in the financial services and insurance sector, also commissioned by Microsoft, suggests that organizations deploying solutions on Azure OpenAI Service can expect increased average revenue per client of 3 to 7% by year 3, and a time savings in content generation efficiency of 30 to 60%.³  

Across the industry, our customers are realizing important productivity benefits in AI innovation. For example, Moody’s launched a custom enterprise copilot that is enhancing productivity and innovation for its 14,000 employees, which they launched in less than 30 days. 

“Financial institutions are confronting the demand for immediate insights amidst an overwhelming surge of data. Microsoft’s Azure and generative AI solutions are pivotal in navigating this challenge by simplifying and democratizing access through copilots, enabling our customers to process an unprecedented volume of data with unparalleled speed.”

Nick Reed, Chief Product Officer, Moody’s Analytics 

Elsewhere, financial advisors at Hargreaves Lansdown are saving two to three hours per week on average, using new AI-powered tools to complete client documentation four times faster than before. Using Azure OpenAI Service, AXA developed its AXA Secure GPT platform in three months, applying generative AI responsibly and with high data safety. And staff at Akbank are saving three minutes per customer support interaction with a new chatbot that can search 10,000 records in seconds. 

Managing risk and compliance  

As financial services firms rely more on technology to operate and innovate, it is increasingly critical to ensure that systems meet regulatory requirements and operate with the reliability, resilience, and security the industry demands.  

The growing reliance on technology has prompted regulatory action around the world, such as the Digital Operational Resilience Act (DORA) in the European Union, a regulation designed to improve the stability and security of the industry. With DORA and other key efforts, Microsoft is actively engaged with regulators and is focused on helping customers achieve smooth and comprehensive compliance. This includes participation in consortia such as the Fintech Open Source Foundation (FINOS), where we are joining other industry leaders in the development of a groundbreaking AI governance framework for financial institutions. 

Helping meet compliance needs

Learn how Microsoft helps you innovate with generative AI while meeting compliance requirements

Get the e-book

Technology also plays a key role in regulatory compliance. Based on the Azure landing zone—a secure, scalable cloud foundation tailored for compliance needs—we are introducing a new FSI landing zone. Available in November 2024, this infrastructure-as-code provides the baseline governance, resilience, security, automation, and prescriptive guidance needed to help financial services organizations and our industry partners meet the strict, non-negotiable compliance requirements of the industry.   

The move to the cloud can likewise accelerate more effective risk management. Bank of Montreal, for example, has migrated its market risk management platform to Azure and realized a sixfold reduction in analysis time, a doubling of speed in job time, and a 30% cost savings. And Belgian bank Belfius has deployed the Microsoft Intelligent Data Platform to assess risks, meet regulatory standards, and more quickly identify unusual behaviors.  

Enhancing security

On the security front, financial services organizations are among the most targeted in the world. Cybersecurity Ventures predicts that the escalating cost of cybercrime will reach USD10.5 trillion annually by 2025, up from USD3 trillion a decade ago.⁴ The increasingly dangerous threat landscape compels firms to better safeguard critical systems, enhance data protection, and maintain compliance with a host of regulations.  

To help cyber defense teams work more effectively amid chronic talent shortages, Microsoft Copilot for Security empowers analysts to rapidly assess an organization’s security posture and create actionable insights and solutions at much greater speed than current approaches. At Intesa Sanpaolo Group, Copilot for Security is speeding the work of threat hunters and empowering junior staff to ramp up dramatically faster. And at Barclays, Microsoft’s security solutions are helping to better detect, investigate, respond to, and protect against security threats.  

Modernizing core systems 

The promise of AI is motivating many institutions to rethink their reliance on legacy systems and migrate mission-critical workloads to the cloud, while also adopting a modern data and analytics platform like Microsoft Fabric. With the significant AI and agent investments we’re seeing across our customer base, the need for a robust data estate strategy is even more critical.  

The collaboration among Microsoft, our partner Quantexa, and European bank Novo Banco is a great example of data estate modernization in the era of AI—combining the power of the Quantexa Decision Intelligence Platform with Microsoft Fabric’s advanced analytics capabilities. 

Modernization also delivers important benefits in agility, resilience, compliance, and costs. In Singapore, CapitaLand Investment has moved to a unified data platform that streamlined data operations across all business units, saving over SGD1 million in operational costs and more than 10,000 worker-days per year. Likewise, Commercial Bank of Dubai (CBD) has upgraded its application infrastructure to Azure, which has been key to quadrupling their client base, and has reduced the time to deploy new services from three months to as little as one day. And Zavarovalnica Triglav is reimagining insurance workflows in Slovenia with automated responses and smart rerouting of customer inquiries, reducing the need for manual intervention by around half for certain requests. 

Looking ahead 

As these and so many other examples demonstrate, AI makes it possible to innovate across the business while maintaining trust with customers, clients, regulators, and within the organization. Microsoft and our partners are poised with both solutions and services on which the industry can depend, and we look forward to continuing the journey with every customer. 

• See Microsoft Learn for more information on Meeting Prep for Financial Services, including guidance on how to participate in the public preview.
• Explore refreshed documentation for Microsoft Cloud for Financial Services, the scalable, industry-tailored platform that helps financial services organizations unlock business value and deepen customer relationships.
• Read our blog, 3 ways Microsoft is helping the financial industry prepare for new DORA regulations, to learn more about how Microsoft is helping the financial services industry prepare for DORA.

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¹Gartner, 2025 CIO Agenda: Top Priorities and Technology Plans for Banking, by Pete Redshaw, September 16, 2024. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

² Forrester, “New Technology: The Projected Total Economic Impact™ Of Microsoft Copilot For Microsoft 365,” a commissioned study conducted by Forrester Consulting on behalf of Microsoft, April 2024.

³ Forrester, “Microsoft Azure OpenAI Service Driving Productivity Gains To Enable New Ways To Engage Clients In Financial Services And Insurance,” a commissioned study conducted by Forrester Consulting on behalf of Microsoft, July 2024.

⁴ Cybercrime Magazine, “Cybercrime To Cost The World $10.5 Trillion Annually By 2025,” November 2020.

The post Accelerating financial services transformation with AI appeared first on The Microsoft Cloud Blog.

What is equally if not more important, however, is the power of AI to help solve some of the world’s most challenging social problems. This resonates with the work we’re doing with Microsoft Cloud for Financial Services, where we strive to not only empower customers but also help improve the world broadly through responsible AI and cloud computing.

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It’s clear that generative AI opens new doors to create greater value for customers, the benefits of which are already dramatic across industries. In the unique case of financial services, generative AI also opens opportunities to address global problems that have long challenged almost every segment of society.

Three areas of financial services impact

In January, I had the opportunity to participate in the World Economic Forum’s annual meeting in Davos, Switzerland. Naturally, AI was a big topic of conversation, and what was most encouraging to me were the discussions and examples of its potential to impact major social challenges. In the context of social good, I see three key areas where this can happen:

1. Equity and inclusion

I see advanced and generative AI holding tremendous potential to create more inclusive and personalized financial products and experiences for a broader population. This could include the latest natural language capabilities in chatbots, integrating screen reading and narration capabilities like Seeing AI into your banking products for the blind and low vision community, and offering speech-to-text functionality for those with hearing impairments. A powerful example of the transformative potential of AI in coding is the story of Anton Mirhorodchenko, a Ukrainian software developer living with cerebral palsy. By using GitHub Copilot, he dramatically simplified his workflow and improved his productivity and outlook.

2. Poverty and stability

Financial inclusion is also key to stability, as technological innovations unlock new opportunities for data-driven financial tools that can empower a broader range of underserved communities to achieve financial independence. There’s a lot of exciting fintech innovation in this area. For example, CWallet, a fintech company specializing in digital wallet services, is empowering migrant workers in Qatar to access financial services with Microsoft Azure. There are other important fintech initiatives underway in places like Latin America and Kenya using AI and digital innovations to improve lives, reduce poverty, expand access to financial services and credit, and narrow the financial inclusion gap.

And it’s exciting to see how other organizations across industries are already innovating with Azure OpenAI Service to enable inclusive growth with technology. For example, as part of our new ADVANTA(I)GE INDIA initiative and AI skilling efforts, Indian social impact organization, Karya, is using Azure OpenAI to help make technology accessible in under-resourced languages and to more inclusive data—with work that also provides rural citizens with training, fair wages, and education about financial tools to make best use of their earnings.

3. Environment

We all recognize the critical importance of addressing climate change, and this is already an important topic in financial services. But I believe we are just scratching the surface on AI’s potential to tackle common risks and opportunities for environmental, social, and governance (ESG) and sustainability efforts in FSI due to slow manual processes, siloed data, data quality issues, lack of insights, and reporting. Generative AI advancements can aid in synthesizing structured and unstructured data, creating ESG insights and recommendations, and reporting out to stakeholders. I’m also excited to see examples from financial leaders like Emirates NBD transforming sustainability measurement capabilities with Microsoft Sustainability Manager.

When it comes to achieving these ambitions—and countless others where AI can make a major difference—success requires more than just cutting-edge technology. Microsoft believes that meaningful innovation can only happen when organizations also embrace a set of enabling principles that focus on ethics and human factors.

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The critical role of responsible AI

The excitement around this next wave of AI is undeniable, but we must wield it responsibly to avoid perpetuating biases or excluding segments of society. At Microsoft, we are committed to helping our customers use our AI products responsibly, sharing our learnings, and building trust-based partnerships.

To help financial services organizations realize AI’s potential, Microsoft has published the Responsible AI Standard, developed an Impact Assessments template, and created transparency documents for customers using our Azure OpenAI Service and products like the new Bing to share what we’ve learned. The Microsoft open-source Fairlearn toolkit can also help financial services organizations ensure their AI systems are equitable by identifying biases in data. When our partner EY put it to the test with real-world mortgage adjudication data, it improved the fairness of loan decisions, narrowing gender disparities from 7% to less than 0.5%. From Davos, you can also watch my panel discussion on the responsible deployment of AI in financial services.

How inclusive design and diversity unlock potential

Inclusive design hinges on the vast spectrum of human diversity, gleaning insights from varied perspectives. Microsoft champions design principles that recognize exclusion, learn from diversity, and create universally beneficial solutions. Technology that is designed in this way means better access, less friction, and greater emotional connection with more people.

Our commitment to helping others shift to inclusive solutions is found in our Microsoft Inclusive Design toolkit. The tools create large-scale solutions, such as digital experiences that are more responsive and less biased, and cities that are more accessible. In the financial sector, this translates into products and services designed to meet the needs of as many individuals as possible, regardless of their abilities or circumstances.

Likewise, diversity is a proven catalyst for innovation among technology teams. Studies show that greater diversity can help teams focus more on facts, process those facts more carefully, and generate more creativity and innovation.¹ Ethnically and gender-diverse management teams are more likely to financially outperform in their industry, and companies with more women in leadership positions tend to be more profitable.² So, for technology to be truly inclusive, it needs to be built by teams that reflect the diversity of its users.

A mission of empowerment through AI

My transition from the banking industry to Microsoft was driven by the potential for meaningful technological innovation that could create a positive change. Despite the challenges we face, my outlook remains optimistic. I hope this blog has set some ideas in motion for you, and I invite everyone to become involved in efforts to use AI in ways that benefit society broadly.

The Microsoft mission is to empower every individual and organization on the planet to achieve more, and we do that by building technology that we believe will change the world. To accomplish that, we know that we must embrace a set of important responsibilities. Trust, reliability, safety, privacy, security, inclusiveness, transparency, and accountability—these are the foundational principles that have guided our leadership in AI over the past decade. Along with our partners and many other global stakeholders, we invite you to join us on the important journey ahead.

To learn more about our commitment to trustworthy AI and to find further resources, please visit our Empowering responsible AI practices website.

¹Diversity wins. How inclusion matters. McKinsey & Company, May 2020.

²Why Diverse Teams Are Smarter. David Rock and Heidi Grant, Harvard Business Review, Nov 4, 2016.

The post AI for social impact: 3 ways financial services can influence global challenges appeared first on The Microsoft Cloud Blog.

From the start, financial services organizations responded positively to our cloud offering, which is designed to help them unlock business value and deepen customer relationships. Built on the broad and integrated capabilities of the Microsoft Cloud, we provide a unique set of industry-specific solutions, components, and AI models that are optimized to ease interoperability and unify data. Solutions built on our cloud have helped financial services organizations improve employee productivity, operational efficiency, and customer experience, all while maintaining security and compliance.

Customer interest soared after November 2022, when the era of generative AI began with OpenAI’s release of ChatGPT and, soon after, the availability of Azure OpenAI Service. And in the past six months, many of our customers have taken promising early steps to start harnessing the power of generative AI to transform their operations and value propositions. This will be central to our participation at Sibos.

Microsoft at Sibos: A focus on payments in the era of AI

Sibos is a key event that brings together industry executives, decision makers, and thought leaders to debate and collaborate on areas such as payments, securities, cash management, and trade. The theme at this year’s event, “Collaborative finance in a fragmented world,” resonates with the work we’re doing across the industry, as it touches on inclusion, risk management, sustainability, and the balance of technology and trust.

Our focus at Sibos was the future of payments in the era of AI. Beyond a complete set of sessions and presentations from experts across our business, we will demonstrate how the latest AI innovations of the Microsoft Cloud, together with solutions from our global partner community, can help commercial and corporate banking customers build new solutions and find new efficiencies.

Among our innovations, we demonstrated an integrated copilot experience for asset management as a new user journey across analytics, workplace services, and data intelligence. We also illustrated the power of AI with new workflow approaches that leverage Microsoft Teams, Microsoft Power BI, and our data solutions.

Partner innovation is central to our cloud

We were especially proud to showcase the contributions of our growing Microsoft partner ecosystem at Sibos. Our global partners comprise a unique community of leading technology providers who help banks, capital markets firms, insurance providers, investment firms, and other organizations efficiently engage as an ecosystem to create products and services, solve specific business problems, and achieve their business goals.

Our strategic partners build solutions on Microsoft Cloud for Financial Services that accelerate the delivery of value to customers. We partner with independent software vendors (ISVs) such as ASC Technologies, Backbase, Finastra, LSEG, Moody’s, and Symphony AI, as well as global systems integrators (GSIs) like Accenture/Avanade, EY, and PwC, to create, implement, and enhance solutions that are tailored to the unique needs and requirements of financial services organizations.

“Our LSEG-Microsoft partnership will innovate in a way that will have a significant impact, disrupt the status quo, and make a real difference to the way our financial services customers discover data, create models, make informed decisions, and create unique insights.”

—Satvinder Singh, Group Head of Data and Analytics, LSEG.

During the conference, there were exciting announcements regarding generative AI investments from Intellect Design and Trade Ledger that will provide deeper insights into our joint efforts.

Microsoft at Sibos 2023

• Matthew Kerner, Corporate Vice President, Microsoft, and Dmitri Sedov, Group Head, Data Intelligence, LSEG had a special session, “Unleashing Capital Markets Generative AI Insights.” They discussed their progress and vision for the future of global financial services solutions built on Microsoft Cloud and AI capabilities powered by LSEG data and analytics.
• The Sibos audience also heard from several Microsoft experts on topics such as the following:
  • Beyond the Buzzwords: Understanding the Reality of AI’s Reach—Jacqueline O’Flanagan, General Manager Financial Services, Microsoft Canada.
  • Instant Treasury: Everything, Everywhere, All at Once—Anita Mehra, Corporate Vice President, Global Treasury and Financial Services.
  • Cloud Sovereignty: Defining the Best Approach and Actions—Sean Foley, Chief Technology Officer Worldwide Financial Services.
  • Embracing ISO 20022: Assessing Opportunities and Overcoming Challenges for Third Parties, and Modernizing Correspondent Banking in a Fragmented World—Peter Hazou, Director of Business Strategy, Worldwide Financial Services.
  • Embracing Global Connectivity to Unlock the Future of Finance—Chris Barry, Corporate Vice President, Microsoft Canada.
• Finally, on the Microsoft booth, Microsoft’s Rosie Mastrandrea, Senior Director of Product Marketing, Regulated Industries, hosted the Women in FSI panel, featuring Microsoft executives Willayna Banner, Senior Director and Head of Web3/Blockchain, Banking, Insurance and Trust, and Karen Del Vescovo, Corporate Vice President, Financial Services, together with our partners Dubie Cunningham, Banking Group President, Zafin, and Kalliope Chioti, Chief Marketing and ESG Officer, Temenos.

Providing a foundation of trust for financial services

The wide range of solutions we shared at Sibos 2023 highlighted how Microsoft Cloud for Financial Services is generating new value for customers and deepening their customer relationships. Across this broad spectrum, customers are realizing specific benefits in these areas:

• Better customer experiences. Using tools, data, and AI to deliver more relevant and personalized interactions, infused with deeper client insights, which results in greater profitability and customer loyalty.
• Empowering employees. Using automation, collaboration, and communications to advance employee productivity, enhance process efficiencies, and alleviate administrative burden.
• Managing risk and compliance. Optimizing operational risk management with technology solutions and programmatic support to help deliver risk insights, comply with regulatory requirements, secure identities, and manage sensitive data against threats.
• Modernizing payments and core banking. Facilitating secure cloud migration of essential core systems and data without compromising control, compliance, or business continuity, which empowers customers to innovate while also reducing costs.
• Creating a sustainable future. Working to help meet environmental, social, and governance (ESG) standards with Microsoft Cloud benefits that both improve the bottom line and better support the planet.

On the horizon for Microsoft Cloud for Financial Services

Moving forward in the new era of AI, we will continue to build on our innovations and learnings, working with our financial services customers to identify and prioritize use cases, enable copilots and plugins for value-add experiences, and explore the new frontiers of generative AI and LLMs. We will continue to invest in flexibility and extensibility with Microsoft Cloud for Financial Services to enable a broader partner ecosystem.

It’s an amazing time to be involved in the financial services industry. Our commitment continues to be empowering our customers to deliver first-class customer experiences, transform their operations, and open new opportunities.

Stay tuned for upcoming blog posts that will explore the impact of generative AI in the financial services industry.

The post Microsoft at Sibos 2023: Showcasing Microsoft Cloud for Financial Services appeared first on The Microsoft Cloud Blog.

In the financial services industry, there has been greatly heightened interest in AI and the transformative opportunities of this new wave of breakthroughs. With the industry’s focus on managing risk and generating returns, generative AI has the potential to drive marked improvements in employee productivity, operational efficiency, and customer experience. In my current conversations with customers and partners, I’m asked how Microsoft can help businesses and organizations get started on the journey. This is especially true in banking, where technology is playing an increasingly decisive role in addressing a broad range of financial, regulatory, and competitive challenges. Generative AI has added a whole new dimension to what we mean by intelligent banking and the possibilities it creates to unlock greater innovation and business value at an accelerated pace.

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What generative AI means for banking

As generative AI capabilities become available to everyone, banks and other institutions will want to build intelligent solutions to provide revolutionary new capabilities—first with their employees and, over time, for their customers. Microsoft will help enable this with Microsoft 365 Copilot, which we announced last month. Integrated across Microsoft 365, this copilot will provide generative AI capabilities to the entire Microsoft productivity suite.

For banks that want to rapidly apply intelligence to improve operations and drive efficiencies, they can apply for access to Azure OpenAI Service to accelerate the deployment of their use cases. Azure OpenAI Service brings together advanced models from OpenAI, including ChatGPT and GPT-4, with the enterprise capabilities of Azure. Critically for banks, it is deployed on their Azure tenants so that all data—including training data and content—stays within the bounds of their organizations. By being fully integrated into Azure, banks also get all the advantages of enterprise-grade security and role-based access included. You also get the benefit of building on the Microsoft Cloud platform where we are infusing AI into all our products, making it easier to integrate these new capabilities into your applications. And it’s only getting better, as we recently announced the availability of GPT-4 in a preview release. GPT-4 is OpenAI’s most advanced LLM, enabling you to drive insights with greater accuracy than previous LLMs developed by OpenAI.

Azure OpenAI Service lets you deploy large, pre-trained, foundational models developed by OpenAI. This means you can potentially transform important tasks such as:

• Writing assistance and content generation.
• Reasoning over structured and unstructured data.
• Summarization of reports and text.

Use cases in banking

As we engage with our customers, we are seeing powerful new use cases emerge. For any scenario, we believe human agency and supervision are critical to ensure that generative AI is empowering and enabling human creativity. In our own products, we enable this through our copilots. The copilot is there to support you and work under your direction, with the human in charge. For example, GitHub Copilot provides code suggestions for developers as they enter code right inside the developer environment. In other situations, a chat-based experience will be a better fit when you are looking to embed knowledge search capabilities or a search bar to accept a prompt to generate some new content. Key banking use cases where generative AI can have the greatest impact include:

• Empowering contact center agents. Generative AI enables you to summarize conversations and get insights across various conversations. Customer sentiment can be measured from the start to the end of the conversation. In addition to summarization, generative AI can provide coaching to contact center staff in real-time, and partially automate the customer journey with human supervision of the next step. It can also feed new intelligence into the contact center knowledge base to enable agents to respond faster to future questions. For all these capabilities, we can aggregate insights for tracking key performance indicators (KPIs) for customer satisfaction, engagement, and impact to the Net Promoter Score (NPS), all of which can be used to continuously improve the experience for customers.
• Empowering advisors. Financial products have extensive documentation that can be difficult to search, making it a challenge to get to an answer quickly. In some scenarios, advisors are certified in their product knowledge. Many banks are exploring the opportunity for generative AI to help advisors retrieve the answers they need from financial product documentation. Generative AI makes it easier to do this through powerful summarization and contextualization capabilities. It can even summarize the key attributes of products in a comparison table. In addition to advisory roles, these enhanced knowledge search capabilities can be built once and used by multiple roles across the bank such as branch staff and contact center agents.
• Content generation. Banks are exploring how generative AI can accelerate the development of content such as pitch books. Pitch books are used by investment banks to generate a proposal for a capital raise or merger and acquisition for an institutional investor. Pitch books are developed collaboratively with content from multiple sources such as an overview of the client, the deal strategy, and marketing materials. For every content generation scenario, human oversight is critical to ensure the quality and accuracy of generated content.
• Code generation. GitHub Copilot was released last year, and developers can now take advantage of generative AI to provide code suggestions for dozens of programming languages, access application programming interfaces (APIs) faster, and accelerate software development. In March 2023, we announced the upcoming GitHub Copilot X, which is trained on GPT-4 and brings AI capabilities to the entire development lifecycle.

Responsible AI by design

As next-generation AI innovation gains momentum, we are optimistic about what it can do for people, industry, and society. Microsoft’s advancements in AI are grounded in our company mission to help every person and organization on the planet to achieve more. We’re committed to making the promise of AI real—and doing it responsibly. Our approach to AI is based on three principles: meaningful innovation, empowering people and organizations, and responsibility.

Accordingly, we’re dedicated to the responsible development of AI systems for the industry, ensuring they will function as intended and be used in ways that earn trust. We were one of the first major technology companies to call for thoughtful government regulation on facial recognition technology and are committed to creating responsible AI by design through our Responsible AI standard. For more information, see “What is Microsoft’s Approach to AI?“.

What’s next

Empowering our customers with intelligent banking capabilities is core to our mission, and we are excited to bring generative AI innovations to them through our Azure OpenAI Service and our copilot offerings. Additionally, we will work with our industry partners to enable them to take advantage of these same capabilities in their own solutions. I look forward to seeing what our customers and partners will create with generative AI in partnership with us. Together, we can apply the world’s most advanced AI models to meet business imperatives responsibly, securely, and with the confidence that can only be achieved with Microsoft Cloud.

Stay tuned for upcoming blog posts that will explore the possibilities of generative AI in the insurance and capital markets segments along with more guidance on responsible AI. We’re excited to help the financial services industry embrace this new era of AI and accelerate transformation.

Finally, learn more about the era of generative AI across the financial services industry by reading other posts in this series:

• The era of generative AI: Driving transformation in insurance

The post The era of generative AI: Driving transformation in banking appeared first on The Microsoft Cloud Blog.

As a business and technology advisor to the financial services industry, we were proud to see so many of our financial services customers drive responsible growth strategies, using their digital foundations to find new and innovative ways to serve and create value for their customers in the current environment.

Looking ahead, I also see six key areas of prioritization in 2023: 

1. Cost take-out and doing more with less. In the face of continued volatility, how can financial services organizations digitize, automate, and better run their processes and operations more efficiently to save on costs and fund innovation? Doing more with less also means applying technology to amplify what institutions are able to do across their organizations so they can differentiate and build resilience.
2. Rethinking customer engagement. To compete in the current environment while transforming for the future, how do financial services organizations reshape their customer engagement and deliver experiences, products, and services that are consistent, contextual, personalized, and continuous across current and emerging channels?
3. Elevating employee experiences. As the future of work continues to evolve, how do financial services organizations create the experiences and culture that attract, energize, and retain talent? And how do they empower employees with the right tools and insights to improve productivity and efficiency, better collaborate, and deliver deeper, more meaningful customer engagement?
4. Expanding security horizons. Cybercrime is expected to cost the world $10.5 trillion annually by 2025 (compared to $3 trillion a decade ago), according to Cybersecurity Ventures.¹ How can financial institutions create an accelerated path to stronger risk management while meeting and anticipating regulatory requirements?
5. Advancing sustainable finance. The extraordinary, time-sensitive challenge to stabilize society through achieving global net-zero emissions is top of mind industry-wide. How do financial services organizations both accelerate environmental, social, and governance (ESG) progress and make sustainability good for business?
6. Exploiting data and insights. Key to advancing all of the above and laying the foundation for future success is becoming a data-driven business. How can financial institutions best tap into the power of internal and external data and build predictive and analytical capabilities that will deliver the right insights to transform all areas of their business?

Shaping the future with tech innovation

While there is no crystal ball for what the future will look like in this rapidly changing world, I am certain of the power of today’s cloud and AI technology advancements—and those on the horizon—to overcome our current challenges, stretch the boundaries of what we think is possible, and create a better future, together.

At Microsoft, our mission is to empower every person and organization on the planet to achieve more. This mission is core to everything my team and I do, and we are committed to co-innovating with our financial services customers to lay the groundwork for their future success.

Through our Microsoft Cloud technology, the industry-specific capabilities in Microsoft Cloud for Financial Services and Microsoft Cloud for Sustainability, and our global partner ecosystem, we enable institutions to bring data and information flows together with insights to enhance customer and employee experiences, optimize business processes, accelerate products to market, speed time to value, do more with less, and enable a greener financial services industry. The security, compliance, and scale of the Microsoft Cloud provides a trusted foundation for efficient operations today and sustainable growth tomorrow.

Looking ahead

We look forward to continuing to help the financial services industry navigate the present and the future and excelling in that journey.

You can find me on LinkedIn, where you can feel free to send me your thoughts and engage in a dialogue.

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¹Cybercrime To Cost The World $10.5 Trillion Annually By 2025, Cybercrime Magazine.

The post Six priorities for the financial services industry in 2023 appeared first on The Microsoft Cloud Blog.

As we continue to expand our Microsoft Cloud for Financial Services offering, we are excited to share our latest updates including new features in general availability and in preview, as well as expanded availability in select new markets. Our goal is to equip every financial organization with the digital capability required to succeed in today’s challenging economic and regulatory environments. We remain committed to helping our financial services customers improve time-to-value, reduce costs, increase agility, accelerate innovation for sustainable growth, and create deeper customer connections.

According to IDC¹, 44.6 percent of financial services respondents consider driving more revenue-generating activities the most critical technology initiative for their organizations, while 41.1 percent are focused on delivering digital services faster and accelerating the shift to the cloud. In this context, delivering technology that speeds time-to-value and improves customer outcomes is vital—and this is exactly where Microsoft Cloud for Financial Services and its latest updates can offer compelling business value.

Compliance Program for Microsoft Cloud: Supporting customers in their compliance needs

Moving to the cloud creates incredible opportunity for our customers in any industry, but for the financial services industry, meeting regulatory requirements is foundational.

At Microsoft, we understand that it is essential to meet or exceed those requirements. We have innovated in this space and are leading the technology industry with our unique compliance program that helps customers navigate the complexities of meeting regulatory requirements around the globe. We are now offering the full value of the Compliance Program for Microsoft Cloud as a part of Microsoft Cloud for Financial Services. This will provide our customers with white glove support for their risk, audit, and compliance teams. It includes four key features:

• Ask an Expert: Directly engage with Microsoft’s subject matter experts to address top-of-mind compliance concerns as well as accelerate regulatory assessment and approval cycles.
• Risk and Control Mapping: Get support from Microsoft with cloud risk assessments to help you meet your due diligence needs.
• Compliance Community: Learn about the latest regulatory compliance developments directly from Microsoft experts, industry peers, and thought leaders via ongoing virtual sessions, summits, and webcasts.
• Proactive Risk Assurance: Receive proactive communication from Microsoft’s experts on external audit results, ongoing updates of Microsoft’s cloud estate, and changing regulatory compliance requirements.

Now generally available: Intelligent appointments

Customers today expect more when it comes to convenience and simplicity in engaging with their financial institutions. The key to addressing these expectations and delivering great customer experiences is in continuous improvement of financial services offerings that better connect people, processes, and systems. In our latest release of Microsoft Cloud for Financial Services, and based on customer feedback, we have focused on continued improvements to the banking customer engagement capability to deliver differentiated customer experiences.

One key challenge for many customers is in finding the right person with the right expertise at the right time, easily and conveniently. Intelligent appointments, now generally available, is a new feature of banking customer engagement that offers customers a self-scheduling meeting experience, on the customers’ preferred channels. It easily and quickly matches customer financial product inquiries with banking experts. Customers can find contacts with the relevant skills and availability for virtual or in-person appointments.

Additionally, intelligent appointments can be used in combination with Virtual Appointments, now available in Microsoft Teams. With Virtual Appointments and intelligent appointments together, financial institutions not only get a great virtual meeting experience, but all the functionality needed to facilitate efficient and meaningful virtual or in-person meetings.  

In preview: Increased investments across verticals

For all organizations regardless of industry, the key to success in the digital era lies in the data: how to store it, secure it, combine it, and harness it. By migrating to the cloud and taking advantage of common data models, financial institutions especially are better able to put their data to work, apply intelligence, extract insights, derive new business models, and deliver better, more differentiated customer experiences through modernized applications that drive new growth.

To that end, we are pleased to highlight a set of new features we are releasing for preview (the United States and the United Kingdom only) that help our financial services customers put data to work and demonstrate our commitment to making Microsoft Cloud for Financial Services more relevant and useful to the whole industry. They include:

• Onboarding application (retail banking and other verticals): Delivers a flexible and intelligent product onboarding experience with automated document workflows enriched by AI analysis to assist the document verification process. 
• Unified client profile (wealth management): Helps deepen client relationships with meaningful advice, providing relationship managers with a good understanding of a client’s financial status, investment portfolios, financial goals, important life moments, and other personal attributes. 
• Property and casualty insurance data model (insurance):  A dedicated property and casualty insurance data model captures new attributes including policy and coverage information, claims, and insurance providers and producers.  
• Wealth management data model (wealth management): An extension to the banking data model that captures new attributes including financial goals and investment instruments specific to wealth management. 
• Small business data model extension (retail banking SMB): Extends the data model foundation of Microsoft Cloud for Financial Services to represent individuals and allows linking small businesses to individual financial holdings. 

Update on our partner ecosystem

Our partner ecosystem has been a key component to the success and scalability of Microsoft Cloud for Financial Services. Our partners are dedicated to better serving customers by helping provide more integrated solutions that reduce risk across the ecosystem, identify new opportunities for innovation, and decrease time to market.  

For this release, we are also pleased to announce new solutions and offerings from leading systems integrators (SIs) like Accenture/Avanade and PWC and independent software vendors (ISVs) like ArganoArbela, ASC, Bambu, BioCatch, Mambu, Thought Machine, and Wealth Dynamix to extend our capabilities. We’ve partnered with these organizations to publish solutions that deliver a differentiated customer experience, empower employees, and manage enterprise risk with solutions built on our offering.

New markets and languages

This month, in our continued efforts to support customers around the globe, we are expanding the international availability of Microsoft Cloud for Financial Services to include Brazil, Singapore, and the special administrative region of Hong Kong. Available languages now include Brazilian Portuguese and traditional Chinese. We plan to continue to expand our cloud presence in many more markets and languages in the months to come.   

Learn more

To learn more and stay informed, visit our Microsoft Cloud for Financial Services website.

¹IDC’s Worldwide CEO Survey, 2022: Industry Perspectives, Doc # US49613122, August 2022.

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Financial services organizations around the world have been focused on how to best accelerate their digital agendas. At the center of this modernization is the need to better serve their clients and empower employees, while at the same time reducing the costs of running their business. And they need to do this quickly.  

The key to digital transformation success is having the ability to make available internal and external data and turn it into analytical and predictive power using cloud and AI innovations.

We designed Microsoft Cloud for Financial Services with those needs in mind and have begun this journey to accelerate transformation in retail banking. Our offering is built on an industry data model to enable institutions to bring data and information flows together with rich insights to enhance customer and employee experiences, optimize business processes, accelerate products to market, and speed time to value. It also comes with a foundation of privacy, security, and regulatory compliance across Microsoft and our partner ecosystem. 

We’re continually expanding our Microsoft Cloud for Financial Services offering to help more customers take advantage of these capabilities and drive innovation for responsible growth. To that end, we are excited to share our latest milestones including our partner momentum, expanded market availability, and enhanced capabilities for creating more connected and differentiated customer experiences.

Growth of our partner ecosystem 

Our partner ecosystem has been a key component to the success and scalability of Microsoft Cloud for Financial Services. Our partners are dedicated to better serve customers by helping provide more integrated solutions that reduce risk across the ecosystem, identify new opportunities for innovation, and decrease time to market.  

Since Microsoft Cloud for Financial Services became generally available in November 2021, we’re thrilled with the interest and support from leading system integrators (SIs) and independent software vendors (ISVs) to extend its capabilities. We’ve further partnered with organizations including Accenture, ArganoArbela, ASC, Bambu, BioCatch, Mambu, PwC, Seismic, and Thought Machine to develop joint solutions that deliver a differentiated customer experience, empower employees, and manage enterprise risk with solutions built on our offering. To date, we now have more than 90 partners in our program and more than 25 solutions built on Microsoft Cloud for Financial Services that our customers can take advantage of for their unique needs.

Expanding availability

Microsoft is committed to supporting customers around the globe. Previously available in Canada, the United States, and the United Kingdom, we’re expanding our offering to include another nine countries—Australia, France, Germany, Ireland, Italy, Mexico, the Netherlands, New Zealand and Switzerland.  

Further, as part of our commitment to providing a complete product experience, Microsoft Cloud for Financial Services is now available in six languages: Dutch, English, French, German, Italian, and Spanish. We have plans to continue to extend our cloud presence in many more markets and languages in the coming months. 

Enhanced customer experiences capabilities

The key to great customer engagements is to continuously improve offerings that add value to the banking experience and more seamlessly connect people, processes, and systems. In our new release, and based on customer feedback, we have focused on continued improvements to Microsoft Cloud for Financial Services’ banking customer engagement capability to deliver differentiated customer experiences.

This capability connects the banking value chain and helps agents personalize every customer interaction with financial understanding to engage with customers on their preferred channel. It intelligently manages service journeys across channels, helping reduce churn and time to resolution. A key new feature, now available in preview for the United States and the United Kingdom markets, is Intelligent Appointments.

The benefits of Intelligent Appointments

Intelligent Appointments are designed to provide customers and banking contact centers with a meeting scheduling experience, online or in-person, that easily and quickly matches the customer’s financial needs with a relevant advisor who is skilled, available, and ready to offer meaningful interactions. This feature leverages Universal Resource Scheduling and the financial services data model for results while connecting seamlessly with Microsoft Exchange and Microsoft Teams.

It’s also incredibly easy to set up a smart scheduling experience using Intelligent Appointments. As shown in this visual, process automation is key to offering flexible scheduling, providing anytime, anywhere access, and ensuring that the needs of the business and customer are met:

We are excited about how this series of updates builds on our strong foundation, and for our continued future investment in the financial services industry. 

Learn more

To learn more about how Microsoft and its partners are driving innovation in financial services with Microsoft Cloud technology, listen to Bill Borden’s recent conversation with Dan Latimore, Chief Research Officer at Celent. And to continuously stay informed about Microsoft Cloud for Financial Services, visit our website.

The post Microsoft Cloud for Financial Services: New updates to further accelerate growth, innovation, and connected customer experiences appeared first on The Microsoft Cloud Blog.

In the payments and financial messaging area, SWIFT is a fundamental player, responsible for a daily average of 42 million messages. At Sibos 2019, Microsoft announced the first-ever successful public cloud-based, end-to-end payment transaction using SWIFT connectivity on Microsoft Azure, as part of our broader investment in payments.

This proof of concept by Microsoft Treasury included hosting their entire payment infrastructure on Azure—including their back-office payment infrastructure, Logic Apps connectivity solution, and SWIFT messaging infrastructure.

Since then, Microsoft has been working closely with SWIFT at a strategic level to architect its virtual connectivity solutions on Azure. With the completion of successful pilots with a range of financial institutions, the results of these investments are now coming to market.

This new solution, called Alliance Connect Virtual, will be available for customers to deploy in Azure in 2022, as a phased launch together with SWIFT. The first release is available now and the next release will follow later this year. Alliance Connect Virtual will enable financial institutions to accelerate their payments modernization strategy to reduce their on-premises footprint, rationalize the total cost of ownership, and rapidly deploy cloud-based payments architecture with the added operational, security and intelligence benefits the Microsoft Cloud offers. We have created a set of reference architectures for our customers to use as guidance in their deployments as well as Azure Policies to simplify meeting security requirements for SWIFT. Sophie Racquet, Head of Alliance Connect and Digital Connectivity Product Management at SWIFT states:

“Launching Alliance Connect Virtual marks a major milestone in supporting our customers’ journey to the cloud. Whether in the cloud or on-premises, our community will be able to experience the same level of security, reliability and availability, and attest their CSP compliance too. We’ve received overwhelming positive feedback from our pilot customers so far and I’m looking forward to our phased launch throughout 2022.”  

Bank of New York Mellon (BNY Mellon) was instrumental in the first public cloud connectivity pilot and is already using Azure-based SWIFT solutions for wire payments with Microsoft’s Treasury division. The company’s Treasury Services group, which delivers global payments, trade services, and cash management, provides payments services for Microsoft Treasury. Saket Sharma, Chief Strategy and Digital Officer for BNY Mellon Treasury Services gave his perspective on the reason for pioneering SWIFT connectivity in the cloud with Microsoft:

“As we continue to concentrate on enhancing the resiliency and capacity of our payments and broader financial market infrastructure through digitization, Microsoft Treasury and Azure have been critical collaborators with BNY Mellon in advancing this agenda. We continue to work together closely, remaining focused on providing always-on payment services and accelerating delivery of new capabilities to clients around the world.” 

Anita Mehra, Corporate Vice President of Global Treasury and Financial Services at Microsoft also shared her view on the collaboration:

“We are thrilled to partner with SWIFT in bringing their Alliance Connect Virtual offering to the Azure public cloud. This allows Microsoft Treasury, an early adopter of SWIFT, to continue our focus on security, compliance & resiliency of customer data.”

SWIFT connectivity on Azure goes further than simply translating an on-premises service to one that runs in the cloud. Microsoft will be offering additional value-add services to support our customers which will include unique seamless integration capabilities with back-end systems and support to the ISO20022 migration initiative (using Azure Logic Apps), and an automated and seamless approach to ensure compliance with SWIFT’s Customer Security Programme “CSP” (using Azure Policy solution for SWIFT CSCFv2022).

Microsoft partners with a range of leading global systems integrators in the financial services industry. To help customers take advantage of the new SWIFT connectivity solution on Azure, we’ve worked with Capgemini, Microsoft’s 2021 Partner of the Year for Financial Services, to build services to help financial institutions with the migration of their current SWIFT infrastructure, including Alliance Access, Alliance Messaging Hub (AMH) or AutoClient, to enable rapid deployment of the SWIFT connectivity solutions on Azure. Jeroen Holscher, Head of Global Payments at Capgemini Financial Services shares his perspective:

‘’Our long-standing strategic partnership with Microsoft and SWIFT’s payments technology is the perfect union to help our customers rapidly transition from on-premise to cloud. Together, we have built a strong framework for enterprises to mitigate risk, reduce TCO, drive innovation at scale, and achieve operational efficiencies. We are very excited to collaborate with Microsoft and support our client portfolio across the banking, financial and other industries to help them build a future-ready business for tomorrow.’’ 

At Microsoft, we want to ensure that every organization has the digital capability required to succeed going forward and are committed to helping our financial services customers improve time to value, reduce costs, increase agility, and accelerate innovation for sustainable growth. This latest initiative with SWIFT highlights that commitment, and we look forward to the value it will bring to drive innovation for our mutual customers and the financial services industry.

Additional Microsoft resources

Learn more information about architectural guidance for the deployment of Alliance Connect Virtual on Azure today. And to access additional resources and learn how financial services organizations are transforming digitally using technologies and solutions from Microsoft and our partners, visit our banking, capital markets, insurance, and Microsoft Cloud for Financial Services home pages.

The post Accelerating payments modernization in the cloud with SWIFT appeared first on The Microsoft Cloud Blog.